Buyer Concerns Q & A

Q: Interest rates have come down in recent weeks. I think they will continue to move even lower, so shouldn't I wait until that happens before I decide to buy a home?

A: Interest rates currently stand at about 6.5 percent and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous—and losing—game. Even those who follow the market for a living can't figure out when interest rates will bottom out. If they could, they would all be multi-millionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.

And home prices don't necessarily move in unison with interest rates. So, if you decided to roll the dice and wait to purchase a home and the price were to actually drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.

In short, the smartest and safest time to buy is now. We know that interest rates are low today. We know that home prices are down. We know that there are plenty of homes on the market to choose from. We know that sellers are willing to bargain. And we know that builders are willing to offer attractive incentives to get your business. Any or all of these favorable variables could change for the worse six months from today.

Q: I have $10,000 to invest. Should I put that money in the stock market, or buy a first home?

A: Thanks to the concept of "leveraging," purchasing a home is by far the best long-term investment. Leveraging means putting down a small amount of money to earn a big return.

For example, say you use that $10,000 to purchase a $150,000 home, and the house appreciates five percent during the first year. That means after one year, the house would be worth $157,500 - a gain of $7,500. Your annual return on your $10,000 investment would be a whopping 75 percent.

By contrast, putting the same $10,000 in the stock market and posting a similar five percent gain would only net a $500 return on investment.

...back

Now is the time to "Buy Smart"

A number of factors have converged to make this the best buyers’ market we've seen in years.
✔ Rates are back where they were before the market turned, making mortgage payments affordable.
✔ The wide selection of inventory means buyers have more properties to choose from.
✔ Homeowners in it for the long-term nearly always come out ahead in building wealth.

Courtesy of John L. Scott (current as of January 2008)

“Live in luxury for less..."

Higher quality at a lower price, offered by
well-respected builders, can't help but be
appealing. High-end features like hardwoods,
media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.

> Get Pre-Qualified

> Articles

> News

> Who is PHMCC

> Insider Information

Love Oregon?
Take a listen to our
radio commercial.

Buyer Concerns Q & A

Now is the time to "Buy Smart"

“Live in luxury for less..."

Higher quality at a lower price, offered by well-respected builders, can't help but be appealing. High-end features like hardwoods, media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.

Higher quality at a lower price, offered by
well-respected builders, can't help but be
appealing. High-end features like hardwoods,
media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.